East Money Securities Research Institute has issued a report initiating coverage on KINETIC DEV (01277) with a "Buy" rating. The report states the company has evolved from holding a single thermal coal asset in Inner Mongolia into a high-growth coal company, now expanding both domestic coking coal mines and overseas self-produced coal operations simultaneously. In the near term, the company's profit foundation is supported by its Dafanpu Mine, which provides stable cash flow and strong dividend capabilities. For the medium term, the Yong'an Mine has entered a joint trial operation phase, and the Weiyi Mine is expected to commence joint trial operations in the second half of 2026. This will upgrade the company's domestic coal assets from solely thermal coal to a dual-driver model of "thermal coal + coking coal." Long-term growth prospects are supported by the South African Makhado project, anticipated to contribute additional production starting in 2026, providing exposure to scarce overseas hard coking coal assets. Additionally, if successfully commissioned, the Sierra Leone rutile project could become the most flexible new contributor to the non-coal segment.
Regarding key financial metrics, the report forecasts the company's net profit attributable to shareholders for 2026-2028 to be RMB 1.55 billion, RMB 2.3 billion, and RMB 2.63 billion, respectively. Based on the market capitalization as of April 29, 2026, the corresponding price-to-earnings ratios are estimated at 11.5x, 7.7x, and 6.8x. The report did not specify a target price.
Focusing on operations, within the domestic coal assets, the Dafanpu Mine has an annual capacity of 6.5 million tons and is a mature thermal coal mine. The Ningxia Yong'an Mine, with a designed capacity of 1.2 million tons, has entered the joint trial operation phase and is planned to reach full capacity in 2026. The Weiyi Mine, with a designed capacity of 900,000 tons, is expected to begin joint trial operations in the second half of 2026 and achieve full production by 2028.
Internationally, the Makhado project, under MC Mining, holds resources of approximately 706 million tons. Its primary products are hard coking coal and 5,500 kcal thermal coal. Joint trial operations are projected to start in April 2026. After reaching stable operation, the project is expected to produce 800,000 tons of coking coal and 700,000 tons of thermal coal annually. In non-coal operations, the property development and management segments are being gradually wound down. The first phase of the rutile project plans three production lines, with commissioning expected in September 2026. Based on disclosed parameters, it is estimated this phase could contribute approximately USD 23.52 million in gross profit.
Risk factors highlighted include potential delays in the commissioning and ramp-up of new mines, risks associated with the construction and logistics of the South African project, possible impairments and slower-than-expected cash flow from non-coal businesses, and financial pressure stemming from capital expenditures and overseas expansion.
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